In an effort to jump start China’s economy, the Chinese government cut key lending rates and pledged a $580 billion stimulus package.  This may be great for unsticking the wheels of China’s economy, exchange traded funds (ETFs) and stocks.

Some money managers are buying up Chinese stock, suggesting that they haven’t been so attractive since the Asian financial crisis in 1998 and citing a likely consumer boom in the big players of the emerging markets, like China, states Gary Gordon for ETF Expert.

The entire world is in a financial crisis and if the developing countries can pull themselves out of a recession, then so can the emerging countries, and probably at an even higher and faster rate.

iShares FTSE/Xinhua China 25 Index (FXI): is down 46% year-to-date. Note that this fund has popped above its 50-day moving average.

PowerShares Golden Dragon Halter USX China Portfol (PGJ): is down 57.1% year-to-date.

Both of these ETFs seem to be making a rebound and we do say to follow the trend; however, be sure to keep a watchful eye on those 50-day and 200-day moving averages. Our strategy is to consider adding these ETFs to a portfolio once they cross these benchmarks.

Tags: Asia, China, Emerging Markets, FXI, PGJ